About a week ago, eBay, the US-based e-commerce platform, was thrown an offer by games retailer GameStop, the latter offering to buy out the former for US$56 billion (~RM219 billion). Well, eBay has given a response to the offer: No.
eBay officially declined the offer, stating that the bid was unsolicited and that it was “neither credible nor attractive”. “The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it,” Paul Pressler, the chairman of eBay’s board, wrote in a letter. “We have concluded that your proposal is neither credible nor attractive.”
If you’ve been living under a rock, GameStop delivered an offer letter to eBay last Sunday that contained its offer. More specifically, the deal would consist of 50% being cash, and the remaining half being GameStop shares. “We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done,” Ryan Cohen, CEO of GameStop, said. “But the full details of the offer are on our website. We’ll see what happens.”
Adding on, Cohen said that he would operate eBay “a lot more efficiently,” including trimming head count and slashing its marketing spend, which he suggested had become bloated under CEO Jamie Iannone without leading to user growth.
GameStop’s offer to buy eBay has been met by industry analysts with universal skepticism; many analysts do not believe that both have the synergy or cohesion to benefit both parties, and that it would be one-sided, leaning in favour of GameStop.
And that is to say nothing of the respective value of each company: eBay is significantly larger in its presence, with a current market cap of over US$48 billion (~RM188 billion), while GameStop has a much smaller market cap of roughly US$10.3 billion (~RM40.4 billion).
(Source: CNBC)
